Why We're Asking for Your Tax Information (W-9 Explained)

Important Notice: This information is for educational purposes only and does not constitute tax, legal, or financial advice. Tax laws are complex, and everyone's situation is unique. The information provided here is based on current IRS regulations as of November 2025 and is subject to change.

This article provides general information about IRS Form W-9 requirements and should not be relied upon as tax advice. Please consult a qualified tax professional, certified public accountant (CPA), or tax attorney for advice specific to your personal circumstances and tax situation.

This content is designed to help you understand why we're collecting taxpayer information, but you remain responsible for ensuring compliance with all applicable tax laws.

For official IRS guidance about Form W-9, please visit www.irs.gov/FormW9 or consult with a tax professional.

You might have received a notification from us asking you to complete a W-9 form. If you're wondering "What is this?" and "Why do you need it?", you're in the right place! Let's break down everything you need to know about this important but simple form.

IRS Form W-9 (Request for Taxpayer Identification Number and Certification) is a standard federal tax form used to collect basic taxpayer information. That's it! It's not a tax return, it doesn't calculate anything, and filling it out doesn't mean you owe taxes.

Think of it like this: when you open a bank account, they ask for your Social Security Number. A W-9 does the same thing, but in a more formal way that meets IRS requirements.

What information does it collect?

The W-9 form requests four basic pieces of information:

- Social Security Number (SSN) for individuals

- Employer Identification Number (EIN) for businesses

That's all. There are no trick questions, no complicated calculations, and no sensitive financial information beyond your taxpayer ID.

As of January 1, 2025, cryptocurrency exchanges are required by federal law to collect W-9 forms from customers before issuing tax forms. This requirement comes from:

We're not asking for this information because we want it - we're asking because federal law requires it. Just like banks, stock brokerages, and other financial institutions have collected this information for decades, cryptocurrency exchanges must now do the same.

We need this information to:

This is important to understand. If you don't provide your taxpayer information, federal law requires us to take specific actions:

Backup Withholding (24%)

Under Internal Revenue Code Section 3406, if we don't have your taxpayer identification number on file, we're required to withhold 24% of your gross proceeds from cryptocurrency sales and send it directly to the IRS as "backup withholding."

What this means in practice:

Why 24%? This is the backup withholding rate set by federal law. It's designed to ensure tax collection when the IRS doesn't have your taxpayer information on file.

Account Limitations

Without a W-9 on file, we may also be required to:

These limitations aren't our choice. They are requirements to ensure we're complying with federal tax law.

You'll Still Receive a 1099-DA

Even if backup withholding applies, you'll still receive a 1099-DA form showing:

When you file your tax return, you can claim credit for the withheld amount. However, this creates unnecessary complications and delays access to your funds.

The solution is simple: submit your W-9 form. It takes about 2 minutes, and once it's complete, you won't have to worry about backup withholding or account limitations.

We've made this process as easy and secure as possible:

Step 1: Log Into Your Account

Visit our platform and log in with your credentials.

Step 2: Navigate to Tax Information

Look for "Tax Information" in your account settings or profile menu.

Step 3: Complete the Secure Form

Fill in your information:

Step 4: Submit

Click “I Agree”, and we'll securely store your information for tax reporting purposes.

That's it! The whole process takes about 2 minutes, and you only need to do it once (unless your information changes).

We understand that providing your Social Security Number online can feel uncomfortable. Here's how we protect your information:

Security Measures:

- Required tax reporting to the IRS

- Issuing your 1099-DA forms

- Complying with federal laws and regulations

"I'm not a U.S. citizen or resident"

If you're not a U.S. person for tax purposes, you won't complete Form W-9. Instead, you'll need to complete:

Our platform will guide you to the appropriate form based on your tax status. Different reporting requirements and withholding rules may apply to non-U.S. persons.

"I trade under a business or trust"

That's perfectly fine! Just provide your business information:

"I already provided my SSN when I signed up"

Due to new IRS requirements that went into effect January 1, 2025, we need an official W-9 form on file. Even if you provided your Social Security Number during account setup, we're now required to collect a certified W-9 form.

Think of it as upgrading from informal collection to formal certification. The same information, but properly documented as required by the IRS.

Q: Does submitting a W-9 mean I consent to taxes?

A: No. You already have tax obligations based on your cryptocurrency transactions. The W-9 simply allows us to report those transactions properly. It doesn't create new tax obligations.

Q: Can I refuse to provide my SSN?

A: Technically yes, but consequences include 24% backup withholding on all proceeds and potential account limitations. Federal law requires us to collect this information or apply backup withholding.

Q: What if my W-9 information is wrong?

A: You can update it anytime through your account settings. If we've already filed forms with incorrect information, we'll issue corrected forms. It's important to correct errors as soon as possible.

Q: Do you verify my W-9 information?

A: Yes. We submit your name and taxpayer identification number to the IRS TIN Matching service to verify they match IRS records. If there's a mismatch, we'll notify you to correct the information.

Q: How long do you keep my W-9?

A: IRS regulations require us to retain W-9 forms for at least 3-4 years after the last transaction reported using that information. We maintain W-9 forms as long as your account is active and for the required retention period afterward.

Q: Can I submit a W-9 form directly instead of using your online form?

A: Generally, we require submission through our secure online system to ensure proper data security and integration with our tax reporting systems. If you have specific concerns, contact our support team to discuss alternative arrangements.

Once you submit your W-9:

You won't need to submit a new W-9 unless:

It helps to understand where W-9 fits in the bigger picture:

The W-9 is the foundation; it allows everything else to work properly.

Form W-9 is a simple, standard tax form that collects basic information we need to comply with federal law. By submitting your W-9:

The process takes about 2 minutes, your information is secure, and you only need to do it once.

Action Item: If you haven't submitted your W-9 yet, log in to your account now and complete it. Your future self will thank you when tax season arrives!

For technical issues with submitting your W-9:

Contact our customer support team. We can help with technical problems, account access, or questions about the submission process.

For tax-related questions about your specific situation:

Consult a qualified tax professional, CPA, or tax attorney who can provide personalized advice based on your circumstances.

For official IRS information about Form W-9:

Visit www.irs.gov/FormW9 or call the IRS at 1-800-829-1040.

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